The Badness Continues

The WSJ has a pretty good article on the India-Pakistan situation that's worth a read if only for this truly scary theory at the end: (h/t TPM)

India has also upset many inside Pakistan by demanding the government hand over 20 terror suspects, many of whom appear to have no link to the attack in Mumbai, Western diplomats say. Acquiescing to India has now become politically problematic, say analysts.

"I don't think there is any Pakistani leader who wants to be seen giving in to demands by India. That would cause problems," said a retired army general who declined to be named. "No one wants to see one of our boys handed over to an Indian court. There would be no justice there."

A top security official has also said the military would be willing to fight India alongside Pakistani Taliban leader Baitullah Mehsud, the man accused of assassinating Mr. Zardari's wife, former Prime Minister Benazir Bhutto, last December. Mr. Mehsud has denied involvement.

The Taliban, too, says it would suspend its fight against Pakistani soldiers to join them a conflict with India.

"Any aggression will be resisted jointly by Pakistan's armed forces and the Mujahideens," said Maulana Faqir Mohammed, a top figure in the Tehrik-e-Taliban Pakistan, in a statement sent to reporters. "We would raise a force of 15,000 tribal Taliban to fight on the side of Pakistan's armed forces. We would infiltrate 500 suicide bombers into India to cause havoc there."

Yeah, that's good news there. The Pakistani Taliban and Pakistani Army fighting India together.

Nothing bad would come from that.

StupidiNews!

• 2 in 3 Americans say they have cut back this year on holiday spending.
• Newspaper publisher Tribune Media could be filing for bankruptcy as early as this week.
• Has Britain's "Surveillance Society" gone too far?
• Another Senator is calling for GM's CEO Rick Wagoner to go as part of any bailout deal.
• A new survey finds more than half of adults and 50% of women over age 18 are gamers.

It's Bad Now And It Will Get Worse

Certainly Obama believes things are going to continue to get worse, but just how bad? One estimate from the UK has November's massive job losses as the good times...and 2009 could see job losses of twice that.

As many as a million American jobs could be lost every month by next spring as businesses struggle to raise capital in financial markets consumed by fear, according to a new analysis.

November was the worst month in the US labour market since the oil crisis of 1974, as more than 500,000 US workers were laid off, according to official figures released on Friday.

But Graham Turner, of consultancy GFC Economics, says the rising cost of corporate debt is now flashing a red warning signal that far worse is to come over the next few months and job losses are heading for levels last seen in the 1930s Great Depression.

Corporate bond yields have rocketed since the credit crisis began as investors flee risky assets in search of safe havens such as US Treasuries. That effectively means many firms are being forced to pay eye-watering interest rates to borrow funds.

Turner says when the gap between the yield on high-risk company bonds and US Treasuries widens sharply, unemployment tends to shoot up - and current credit conditions are pointing to a doubling in the pace of layoffs, to more than a million workers a month, by spring.

'The correlation is holding up all too well,' he said. 'It's very disconcerting.' He added that the pace of layoffs already happening in the US 'is indicative of panic'. During the 1970s oil crisis the panic was relatively short-lived, he says. 'But the worry now is that this will just roll on and on.'

Sustained job losses of that magnitude would indeed be catastrophic for America and the world. Consumer spending would drop like a stone, and retail level goods and services would evaporate, taking the economy with it. We're talking a deflationary dealth spiral scenario, one where millions of jobs would vanish and the US would face shortages, riots, and chaos. The effective unemployment rate is 12.5% now...it could end up twice that, with one in four working age Americans either out of work, under-employed, or no longer seeking a job because there will be none to have. The Happy Face economic press has so badly underestimated this crisis that the reality is more and more likely to be an "effective depression" where the entire global economy is restructured...and when it is, America will no longer be on top.

There is no visible bottom to this abyss. 2009 is going to be one of the worst years in American history, bar none.

Out Of Gas

The Kroog weighed in on the Big Three today, and the results were not pretty.

Nobel economics prize winner Paul Krugman said Sunday that the beleaguered U.S. auto industry will likely disappear.

"It will do so because of the geographical forces that me and my colleagues have discussed," the Princeton University professor and New York Times columnist told reporters in Stockholm. "It is no longer sustained by the current economy."

Krugman won the 10 million kronor (US$1.4 million) Nobel Memorial Prize in economics for his work on international trade patterns. Some of his research on economic geography seeks to explain why production resources are concentrated in certain locations.

Speaking to reporters three days ahead of the Nobel Prize ceremony, Krugman said plans by U.S. lawmakers to bail out the Big Three automakers were a short-term solution, resulting from a "lack of willingness to accept the failure of a large industry in the midst of an economic crisis."

And I happen to agree with him. As I've said, there's nothing that can really be done to solve the US auto industry's problem that doesn't involve the nationalization of the entire industry, which is just unacceptable given there's plenty of car companies out there. Even in the short term if the automakers survive, they simply will die long term as people won't buy cars from a bankrupt company. Obama will be forced to do it, as losing millions of auto jobs is even more unacceptable, and the price autoworkers will have to pay is to deunionize completely and take brunt of the concessions. The GOP will demand it and will get it. The only other option is to lock out foreign autos completely in a bout of nationalist protectionism.

It's not the auto industry that's going to vanish first, it's the unions...and with it the last of the blue-collar middle class in this country.

Big Bucket Of Scary

Now this...this is a bad thing.

India's foreign minister accused Pakistan on Sunday of trying to dodge blame over the Mumbai attacks' Pakistani origins by leaking a story about a hoax call to Pakistan's president that set off diplomatic panic.

Pakistan's Dawn newspaper reported on Saturday that Pakistan had put its forces on high alert after a caller pretending to be Indian Foreign Minister Pranab Mukherjee threatened President Asif Ali Zardari while the attacks were still going on.

"I can only ascribe this series of events to those in Pakistan who wish to divert attention from the fact that a terrorist group, operating from the Pakistani territory, planned and launched a ghastly attack on Mumbai," Mukherjee said in a statement released on Sunday.

Pakistan insisted the call came from an official and verified phone number in India's foreign ministry.

New Delhi has demanded Islamabad take swift action over what it says is the latest anti-India militant attack emanating from Pakistani soil.

At least 171 people were killed during the three-day assault last week across India's financial capital, which has imperiled the improving ties between the south Asian nuclear rivals.

Officials from "third countries" called to inform Mukherjee of the hoax call, he said. He did not name them, but Dawn said the caller was a worried U.S. Secretary of State Condoleezza Rice, who was in both capitals last week to ease tensions.

"It is, however, worrying that a neighboring state might even consider acting on the basis of such a hoax call," he said.

Yeah, that's right. A hoax call after Mumbai nearly led to an open conflict between two nuclear powers. And the really scary part is it still might do so.

Think about it. If you're Al-Qaeda, what better way to destabilize Pakistan's government and take control of their nukes than to force the Pak military hunting you out to the Kashmir border to defend against India, then hit the capital Islamabad while everyone's worried about external threats and announce you're in charge?

Double G Goes Double Barrel

Nobody on the left does righteous indignation like Glenn Greenwald. When he latches on to The Stupid, he doesn't let go. Ever. Today's poor schmuck in his jaws is former Clinton OMB official Matt Miller, who rightfully gets both barrels.

Matt Miller, a Senior Fellow with the Center for American Progress (CAP) and former official in the Clinton OMB, has an Op-Ed in The Washington Post decrying the "kiss-and-tell" books written by top presidential aides once they leave the White House, and he singles out as examples the "tell-all" books written by George Stephanopoulos and Scott McClellan (whose name is repeatedly misspelled throughout the Op-Ed). Miller doesn't merely want former officials who write such books to be stigmatized and scorned, though he does want that. Far beyond mere disapproval, he actually wants to vest presidents -- or at least the new President -- with the formal legal power to block publication of these books in the first place:

Just as mergers and marriages that flourished on handshakes and vows had to turn to coarser arrangements once the stakes of break-up became high, the politician-aide relationship now needs its contract. In other words, it is time for the political prenuptial. Barack Obama should simply require key advisers and officials to sign a binding contract of confidentiality as a condition of employment. Aides should pledge not to disclose anything they see until, say, five years after their boss leaves office.

That is an atrocious idea. For one thing, it's hard to see how enforcement of these silencing contracts could be permitted in light of the First Amendment. And I doubt that Obama, for appearance reasons if nothing else, would take this proposal seriously. But those matters aside, the thinking behind this proposal is common among Beltway insiders and reveals much about the ways of Washington.

The attribute that defines Beltway culture as much as anything else is obsessive, gratuitous secrecy. The vast bulk of what takes place of any consequence occurs away from the public eye. Even laws which Congress enacts are proposed, negotiated and written behind closed doors with lobbyists and operatives. By the time these bills are even known to the public, let alone openly "debated," their outcome is a foregone conclusion. Floor "debates" and Congressional votes are pure theater, empty rituals with no purpose other than to ratify pre-ordained outcomes that were determined in secret.

Presidents in particular already possess a vast arsenal of weapons to prevent transparency, from the virtually unfettered power to classify to borderline-omnipotent investigation-quashing tools such as the state secrets and executive privileges. As Radley Balko detailed in his recent article urging the Obama administration to renounce claims of executive privilege except where genuine national security secrets are jeopardized by disclosures, these powers have grown so rapidly over the last decade that Presidents can now maintain an almost impenetrable wall of secrecy around virtually everything they do. CAP's own blog, ThinkProgress, just recently cited a report documenting "that by almost every measure, government secrecy is rising."

As always, Double G is a good read, and of course he has a good point here. Obama is breaking down that wall of secrecy, as is VP-elect Joe Biden. There's no way the opposite would be acceptable after eight years of Preznitman From Preznitland.

A Bit Less Democratic Stupidity Today

Indicted Congressman "Dollar Bill" Jefferson of Louisiana is gone.

Nine-term Democratic Rep. William Jefferson, who has been battling scandals and a federal indictment for the past three years, lost his bid for re-election on Saturday.

Republican challenger Anh "Joseph" Cao, an attorney and community organizer, defeated Jefferson in the 2nd Congressional district race. He will become the first Vietnamese-American elected to Congress.

With 100 percent of precincts reporting, Cao had almost 50 percent of the vote to Jefferson's 47 percent.

The 2nd Congressional district, in and around New Orleans, is mostly African-American and heavily Democratic, and Jefferson appeared to be favored to win re-election going into the election.

"The people of the second district were able to transcend party, transcend race," Cao said after claiming victory Saturday night.

Jefferson was as crooked as they come, frankly. Also, I was kind of getting sick of him being the guy thrown in the face of every Democrat that somehow proved that with this one scuzzy guy, the entire Democratic party was just as corrupt as the entire GOP.

Which is fine. The Wingnuts will move on to Jack Murtha next and scream he's the most corrupt guy in Washington.

Obama's Jobs Plan

With Friday's hideous job numbers out signaling truly bad times ahead, Saturday was certainly the right time for Obama to announce his job creation plan.

President-elect Barack Obama on Saturday revealed five parts of his plan to save or create 2.5 million jobs by 2011, and said he will push for immediate action by Congress when he takes office in January.

Obama wants to make public buildings more energy-efficient; repair roads and bridges; modernize schools; increase broadband access; and ensure health care uses the latest technology.

"Our government now pays the highest energy bill in the world," he said in the weekly Democratic Radio Address.

"We need to upgrade our federal buildings by replacing old heating systems and installing efficient light bulbs. That won't just save you, the American taxpayer, billions of dollars each year. It will put people back to work."

In addition, he said, "It is unacceptable that the United States ranks 15th in the world in broadband adoption. Here, in the country that invented the Internet, every child should have the chance to get online."

"In addition to connecting our libraries and schools to the Internet, we must also ensure that our hospitals are connected to each other through the Internet."

"These are a few parts of the economic recovery plan that I will be rolling out in the coming weeks. When Congress reconvenes in January, I look forward to working with them to pass a plan immediately.

"We won't do it the old Washington way. We won't just throw money at the problem.

"We'll measure progress by the reforms we make and the results we achieve -- by the jobs we create, by the energy we save, by whether America is more competitive in the world," Obama added.

Indeed, the size and scope of Obama's national stimulus pacakage is growing by the day. And with state after state calling for long-needed Federal infrastructure investment and consumer consumption drying up quickly, it can't come soon enough.

I'm hoping this means that Republicans will be overwhelmed by the popularity of this and will have no choice but to concede, after all, politicians who vote against job creation for actual voters tend to get removed from office by those voters.

We'll see.

StupidiNews, Weekend Edition

• O.J. Simpson gets 15 years in prison for his bizarre armed robbery attempt in Vegas.
• President Bush finally admits we're in a recession.
• Another Bush "Midnight Regulation" allows loaded weapons in national parks.
• First Georgia Community Bank becomes the 23rd bank closed by the FDIC this year.
• Firefox has now claimed 20 percent of the web browser market, knocking IE under 70%.

A Second Chance For The Big Three's Second Chance

I had pegged the bailout of the auto industry as all but dead, but it seems that today's dismal job numbers with over half a million jobs lost in November alone has spurred both the GOP and Democrats into action on the Big Three automakers.

Efforts to provide emergency loans to struggling U.S. automakers gained momentum on Friday after a grim U.S. jobs report spurred talks between congressional leaders and the White House.

U.S. House Speaker Nancy Pelosi has dropped her insistence that the money come from the $700 billion financial bailout fund that the Bush administration had refused to use on automakers, said a congressional aide familiar with the discussions.

Another congressional source said Pelosi was open to the idea of tapping the existing $25 billion advanced energy technology loan fund to help auto companies - an idea the White House has promoted.

Such a move would likely build bipartisan support in Congress for a bill that could be signed into law by President George W. Bush.

So far, this is being spun as a victory for the GOP, but the reality is just a bit further down the article...

Congress and the White House are anxious to prevent the threatened near-term collapse of one or more of the Detroit Three - which directly employ 250,000 people.

Somebody in the White House has apparently told Bush that if his final month in office leads to the death of the American Car, well history is really, really not going to look kindly upon him. Not that history had any other place for him but dead last of 44, but apparently that's too much for even Bush to handle.

The fact of the matter is the effective unemployment rate, the rate that includes all the folks who have stopped looking for work, or are scraping by on part-time work, has now reached 12.5%. That means one in eight American workers don't have a full-time job right now, and since December 2007, America has lost 2.7 million jobs.

Neither side wants to take credit for losing millions more should the auto industry fold. In a matter of about 8 hours today, both Obama and Congress have swung into action and the White House has done a complete 180.

By next week, an auto industry bailout could be on Bush's desk.

What a difference a day makes.

Operation Big Payback

After I outlined the GOP plan for the next four years yesterday, the always dependably awesome Digby gives us specifics of how the GOP will execute that plan to make sure Obama Is Worse Than Bush Ever Was In All Things, starting with Bush appointed US Attorney Mary Beth Buchanan basically daring Obama to fire her.

When the US Attorney scandal broke, you'll recall that there was a lot of wingnut chatter saying that because Bill Clinton had asked for the resignations of all US Attorney's at the beginning of his term, Bush had a perfect right to fire US Attorneys who refused to do political dirty work. They set the stage for this at the time. It was entirely predictable that the new administration would be held to a completely new standard --- he would not be allowed to fire any US Attorney who had been appointed by Bush for any reason at all or risk being accused of using the Justice department for partisan gain. It's how they roll.

US Attorneys should be apolitical as much as possible. They most certainly should NOT be hyper political actors as this person was, working closely with a disgraced Attorney General and involved in the scandals. It's outrageous that anyone like her would even still be in the Justice Department today under Mukasey.

If she stays, she will be working against the Obama administration from within. There are probably many others like her at all levels, some burrowed very deeply. After all, the US Attorneys were fired for refusing to go along with political prosecutions or to make way for political friends. You have to wonder about those who weren't fired.

Keep in mind no matter what Obama does, the GOP will say he's Worse Than Bush(tm). The Village Idiots are already setting the public up for this. It's the battle cry for the next four years.

Count on it. The only way the GOP gets back into power this generation is to do everything they can to assure Obama is Worse Than Bush(tm). This means relentless opposition to anything and everything Obama does in an effort to politicize it and to compare it to Bush. There will not be any magical migration of GOP moderates to help Obama. The pressure the moderates will be under from the far right will be crushing. GOP moderates will play ball with a lockstep assault or they will be replaced in primaries by those who will in 2010 and 2012.

Obama must go down as the worst President in modern American history, replacing Bush and Nixon, or the GOP is done for a generation or more. They know this. They will regroup, redouble their efforts, and resume the assault.

The era of hyper-partisan politics is just beginning.

Zandar's Thought Of The Day

The same Village Idiot Happy Face economic experts who told us the Bush economy was the greatest story never told by the Evil Liberal Media are the same ones who have been saying the markets will hit bottom any time now and are the same ones saying after today's devastating job loss numbers that once again...the worst is over.

Do you believe the worst is over?

You willing to bet your job on that?

The Ten Percent Solution

To go along with the worst lob losses since the year before I was born, we now have news that one in ten Americans are at least one month behind on their mortgage payments.

A record one in 10 American homeowners with a mortgage were either at least a month behind on their payments or in foreclosure at the end of September as the source of housing market pressure shifted to the crumbling U.S. economy.

The Mortgage Bankers Association said Friday the percentage of loans at least a month overdue or in foreclosure was up from 9.2 percent in the April-June quarter, and up from 7.3 percent a year earlier.

Distress in the home loan market started about two years ago as increasing numbers of adjustable-rate loans reset to higher interest rates. But the latest wave of delinquencies is coming from the surge in unemployment.

And things are only going to get worse. Even if the housing market hits bottom...who is going to have the down payment and the creditworthiness to get a mortgage, a car loan, or any other major bank loan?

Banks are sitting on hundreds of billions, and they aren't loaning it out. The real problem isn't even the housing collapse anymore, but the collapse of the American middle class economy. With no middle class conusmers to consume, and no manufacturing base to rebuild a middle class, America's economic woes could very well last for a very, very long time.

Snow Job

Economists are predicting November was the worst job loss month in 26 years, an estimated 335,000 jobs went bye bye, the educated guess is unemployment at 6.8%. The real numbers will be out at 8:30.

I'm expecting them to be significantly worse.

[UPDATE] "Significantly worse" indeed. A staggering 533,000 jobs lost in November to a 6.7% unemployment rate, the worst single month since 1974. The newly revised numbers for September and October mean a heart-stopping one-and-a-quarter million jobs lost in the last three months alone.

Almost 2 million jobs now lost in 2008. December's numbers will certainly put us over that mark. The pain is just beginning, folks. No bottom is visible. 2009 could actually be worse.

The Big Three's Last Shot

Today the CEOs of the Big Three automakers go before the House to plead their case one last time, but the reality is Democrats don't have the votes in either chamber of Congress to pass anything.

With time fast running out, Congress and the Bush administration will wrestle again today over whether to lend $34 billion to Detroit automakers, even after senators heard grim warnings that their failure could cost 2.5 million jobs and the liquidation of three iconic U.S. companies: General Motors, Ford Motor Co. and Chrysler Corp.

Mark Zandi, chief economist at Moody's Economy.com, told the Senate Banking Committee on Thursday that even the $34 billion that the executives of the three companies pleaded for would hardly be enough. Detroit eventually would need $75 billion to $125 billion to avoid almost certain liquidation over the next two years.

Still, Zandi told senators that the automakers' failure would be "so damaging to the economy, you don't have the choice."

Bailout fatigue among the public and lawmakers is blocking the money in Congress. Lacking votes in both chambers, House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid are preparing to blame the Bush administration for letting Detroit go under. Reid said Treasury Secretary Henry Paulson could "with the stroke of a pen" save the automakers by tapping the $700 billion financial rescue Congress passed in October.

Michigan Democratic Sen. Carl Levin saw in Thursday's testimony a new path to do just that.

Ford and GM executives pointed to an estimate by J.P. Morgan that the automakers' failure could trigger $1 trillion in losses to the banking system. Levin described that scary figure as key to persuading Paulson to allow automakers access to the $700 billion.

But President Bush said in an interview with NBC News, "No matter how important the autos are to our economy, we don't want to put good money after bad. In other words, we want to make sure that the plan they develop is one that ensures their long-term viability for the sake of the taxpayer."

It's pretty clear that the bailout is just not going to pass. It's even clearer that GOP lawmakers in states outside the Big Three's home of Michigan, Ohio Pennsylvania and Indiana have no interest in saving GM, Ford and Chrysler when their own states plan to benefit from foreign automakers having plants in those states outside the Rust Belt. And it's even more clear that the President will simply veto anything that comes down the pike.

The GOP is bound and determined to kill the Big Three in order to kill the UAW, plain and simple. Obama could step in at this point and promise something in January, but that may be too late.

We'll see.